Every 10 years, those who adopt the AIA (American Institute of Architects) contract series of documents can anticipate a fine-tuning. Now that the most recent phase of tune ups is here, there are some areas to become familiarized with so your firm isn’t left high and dry.
Decision Maker Role
In previous versions of the contract template, the architect was positioned as the primary decision maker. After that series, this role was clarified to establish that the architect serves as not only a first decision resource, but also the mediator in the case of conflict. Since architects are essentially partners to all other parties in the construction process, it seemed a bit unfair to those other parties that the architect called the shots (and not the owner). In the most recent clarification, now communication can be a bit less dependent on solely the architect. For example, a contractor can work directly with an owner, but must keep the architect updated on any areas that pertain to their role.
The background on this transformation is tied to the fact that architects were traditionally one of the most educated groups in the construction process. Their schooling in combination with the timing of being engaged so early in a project’s lifecycle led to their placement as a decision maker. Since things have shifted dramatically, the decision-making requirement has also leveled out to other players.
The Insurance Factor
In the 2007 version, insurance requirements were a portion of the main contract and are now included as an exhibit. With the frequent change to this section, many see this improvement as the strongest value-add because of the drastic simplicity. Plus, now there is room for additional detail pertaining to risk and what each party should anticipate as far as insurance and bond obligations.
It’s Not You, It’s Me
When a project resource just isn’t making the cut, sometimes this isn’t made clear until the work has begun. Beginning in the 2017 contracts, payment for these decisions is handled. Previously payment was inclusive of services up to termination and all profit and overhead. Now, there is one number: a clear termination fee. This easy to calculate number is a much easier starting point for negotiation rather than the overly complicated inclusions previously upheld.
No contractor is stranger to the concept of retainage. However, this topic received little focus in previous editions of the AIA documentation. Now, there is a portion that addresses concerns in this area. Caveats such as a contractor finishing work earlier than anticipated or payment timing and fair practices are all able to be confronted openly, yet in a guided fashion.
Let’s Get Digital
Now, the AIA has fully accepted the use and validity of electronic communications. More formal documentation and legal notices still require hard copies, but everyday project communication and documentation has gained some stature in the digital world.
Bringing it All Together
Although every 10 years is an arguably long time span to refresh such a frequently used contract, this group of changes seems to be pretty promising for users. Thanks to Kim Slowey, contributor to Construction Dive, I was able to learn the nitty gritty details of this new legal revamp in her feature article published today.